finally! Used car prices are dropping, but consumer reports say there’s a catch
Buying a used car has been particularly troublesome over the past two years. Seeing prices for used models exceed the MSRP for a new model is enough to make any self-respecting person want to climb walls. Well, good news; According to Consumer Reports, average used car prices are dropping, but there’s a catch.
When will used car prices drop?
We did it, y’all! Finally, we were freed from this crazy used car hell. Restrain yourself. Yes that’s right. According to Consumer Reports, after historically high used car prices peaked in 2021, prices have officially begun to ease. Labels still have a long way to go given how far they’ve come, but a drop of 3 percent, on average, shows things are moving in the right direction. Unfortunately, as we said, there is a problem.
Lower prices come along with higher interest rates. As usual, lower prices only help those with enough cash not to need financing. Although buyers will enjoy slightly lower rates for now, higher interest rates mean paying more over the life of the loan.
Is now the right time to buy a used car?
For most people, the right time to buy a used car is when you need it. However, Consumer Reports offers some tips for buying a used car wisely, regardless of market.
- Act fastThe right time to buy a car is when you find a good deal. The market changes so quickly that waiting outside is not always the right choice. If you find the model you want at a price you can afford, there is no guarantee that you will have the same car tomorrow.
- be informedAn informed buyer is able to make a quick decision in the car market. If you know what you’re looking for, the fair price range, and potential issues with said model, you can make a sound decision quickly, if necessary.
- Consider buying newPurchasing a new car may seem like a frivolous luxury to many car buyers. However, in this market, it may generally be better to buy new products. Prices are close to light use, and you get a new factory warranty on new cars. You’re also more likely to find a manufacturer’s deal on new cars than a used car from a dealership.
- Look at the old modelsOlder models are dropping in price the fastest as used car prices start to drop. With older cars, mileage often comes along. Consumer Reports suggests focusing on cars with a good reputation for reliability.
- Get your financing: Before buying a car, see what your bank or credit union will offer you for a loan. If nothing else, this will provide context for what a merchant loan looks like. This may also give you more negotiating power.
- Don’t be pickyThis last piece of advice can be hard to follow. However, the more open you are with things like trim level, color, and even model year, the easier it will be to find a car you can afford. Be open and honest about what you need and what you can afford. It will save you heartache in the long run.
Should you buy a new or used car?
The car market is a crazy place even with low prices. Despite the drop in used car prices, Consumer Reports still suggests that you should hold off as long as possible when buying a used car. New cars are often the best buy as long as you don’t get locked into the dealers’ insane mark-ups. With higher interest rates, buying a used car can cause you to owe money on a depreciating car for longer. Remember to stay informed, open, and realistic. Good luck out there.
#finally #car #prices #dropping #consumer #reports #catch